Mining has been banned at the prime Kimberley tourist attraction of Horizontal Falls but copper exploration will continue in surrounding areas.

Described by famed naturalist Sir David Attenborough as one of the world's greatest natural wonders, massive tidal movements at Horizontal Falls cause the sea to rush through narrow gaps between cliffs in the Talbot Bay in the Buccaneer Archipelago, 110km north northeast of Derby.

This creates a waterfall effect as water banks up against one side of the passage.

On Wednesday, West Australian resources minister Norman Moore said the state government had established a 72 square kilometre mining exemption area around the site, providing greater protection than national park status.

The exemption zone centres on the falls and is surrounded to the north and southeast by mineral exploration leases granted to Perth-based Pegasus Metals.

The Department of Mines and Petroleum does not have the right to repeal exploration leases once they have been granted.

Pegasus, Koolan Iron Ore Pty Ltd and Kimminco Pty Ltd voluntarily withdrew exploration licence applications or surrendered parts of an already granted exploration licence in the now-exempted zone "as a show of support for the state's move to protect the falls", Mr Moore said.

While Pegasus's Copper Cove, Bower Bird, Copper Cliff, Poultons Chasm and Poultons Gorge prospects at its McLarty Range project are next to the exemption zone, there's a big difference between exploring and mining, a department spokeswoman said.

She said the existing exploration licences were open for public comment before they were granted, but no objections were received at the time.

A Pew Environment Group spokesman said the mining exemption was a step in the right direction, but there were fears any future mining activity near the falls could lead to a run-off of contaminants into the marine environment.

"It's great to see the government recognise this iconic part of the Kimberley coast, which is a major tourism drawcard," he told AAP.

"Saying that, this region is still under serious threat from mining."

Pegasus Metals described the McLarty Range project, in a presentation lodged with the Australian Securities Exchange on Monday, as "the big prize".

In addition to copper, it contains gold, silver and zinc.

Pegasus Metals holds 5000 sq km of tenements at McLarty Range, according to the presentation.

The rugged site can be reached only by sea or air.

The Horizontal Falls have also been nominated for inclusion on the Register of State Geoheritage Sites, Mr Moore said.